CRACKDOWN BY CFPB ON ALL MORTGAGE SERVICERS
On Feb. 10, Steven Antonakes, the deputy director of the Consumer Financial Protection Bureau, said that servicers have had more than a year to prepare for the reform rule that took effect on Jan. 10, and he suggested the CFPB would move quickly and harshly against violators.
Antonakes acknowledged that the agency has previously suggested it would be tolerant of mortgage servicing companies so long as they were making a "good faith effort" to comply with the rule, but he warned that such allowances only extend so far.
"A good faith effort, however, does not mean servicers have the freedom to harm consumers," Antonakes says. Please understand business as usual has ended in mortgage servicing.
Antonakes' speech was a clear sign that the agency has shifted from its previous message of forbearance to a more hard-lined stance regarding the mortgage servicing rule. "We put out plain-language summaries of the rules and posted video guidance...In addition, as we became aware of critical operational or interpretive issues with our rules, we addressed them," he says.
CFPB officials are frustrated with the mortgage servicing industry's lack of progress in cleaning up its mistakes. It is still widely regarded as rampant with issues, including poor documentation practices, wrongful foreclosures on homeowners and resale problems. (nmn22214)
Since it is so easy for the borrower to complain to the CFPB on line now, it may be a lot less expensive to have us audit you first before the CFPB. If you recall, Fidelity Mortgage Corp. and its owner jointly were hit with an $81,000 plus penalty over as a kickback allegedly made to a bank in the form of a lease. As a servicer, you would be hit a lot harder.
DOES OCWEN LOAN SERVICING CONDUCT DUAL TRACKING IN A VIOLATION OF THE LAW?
I have just read a commentary by “Donna” in the National Mortgage News and I quote: “Dual tracking is being done by Ocwen Loan Servicing, except they don't know it because their servicing arm in Mumbai, India, does not know what is happening here with trustee sales. There is only one way communication because they do not allow e-mails or phone calls out of the center. There is no response to any request or e-mails in, and only drive by valuations which are inadequate when interior damage is present. Could it be that foreclosure is preferred because the servicer makes more money with a foreclosure than a modification or short sale?" (National Mortgage News Saturday 2-22-14 comment area).
Based upon the comments of Antonakes, it may be he should pay a visit to Ocwen? What do you think? We make no representations as to the truth, veracity or accuracy of the comment not knowing its author but if true she does seem to have some intimate knowledge about the alleged lack of two-way communication. The comment appears directly below the David Elliot/Seth Muse blog in NMN about a lawsuit entitled Cataldi v. New York Community Bank which says a private cause of action is allowed under 1024.42 of RESPA but no injunctions, only damages and costs can be recovered in the case involving dual tracking among other things. Notwithstanding the plaintiff suing Ocwen lost.
IN CONTEMPLATING A LOAN OFFICER CONTRACT BE AWARE OF THE FOLLOWING POTENTIAL ISSUES
Contracts are negotiable. Depending on how good a producer the person is and how good the company is. So, even if there is an employment contract between the company and mortgage loan originator you should consider reviewing it with these thoughts in mind.
- Who owns the loan officer pipeline when the loan officer quits or his terminated with or without cause?
- If the loan officer is disabled or takes a leave of absence such as family or sick leave what happens to the loans in the pipeline and how is the loan officer compensated based upon the status of the loan at the time of departure?
- Does the loan officer take any leads in the loan officer possession when departing from the company?
- Is the loan officer required by company policy to obtain written approval before internet and social media marketing? (Remember, ultimately the designated officer, qualified employee, supervisor can be held responsible and disciplined for lack of supervision if nothing else. We have several of these cases we are representing in two states at the moment)
- Does the agreement provide who is the owner of the data base when the employee leaves either voluntarily or involuntary?
- When does the loan officer receive payment on a loan? (e.g. California requires payment to employees at least twice per month with certain exceptions.)
- Does the employment contract and/or company policy manual provide when a commission is not earned? (e.g. fraud?)
- Does the MLO contract provide how much of the total commission the MLO receives when the loan closes after the MLO has left the company?
- What are the reasons you would not get paid a commission on a file?
- Does the MLO contract have a non-competition clause? (Not legal in California, Legal in Pennsylvania, etc.)
- Does the employer company enforce privacy policies of client data being retained by MLO’s such that the Gramm-Leech-Bliley Act is not violated aside from state law privacy?
- Does the agreement and/or company personal policy manual provide the reasons why and MLO can be terminated?
- If the MLO violates company written policies or state, federal and agency laws and regulations, what is the termination policy in this case?
- Does the MLO pay for marketing and other promotions?
- Is the Employer allowed to change the terms of the written contract without notice?
- Does the Employer require commissions or parts thereof paid back and if so under what conditions? Do any of the conditions violate Labor Code laws or regulations?
- When updating or signing a contract always review it for content to see that it covers all aspects of the reasons for the change.